Whether you’re on a tight budget this year or you’re just trying to be more conservative with your spending, it’s smart to create a holiday budget. A budget will put you in control of your spending. It will also make the holiday season a lot less stressful. Additionally, when you create a budget, you have the opportunity to use it to communicate your spending goals and limits with your other family members.
Here are 4 tips to help you create a holiday budget:
1. Create a list of expenses: We have a tendency to forget how much more expensive the holidays can be, and end up overspending, so if you create a list, then you will have less surprises.
2. Do it right: It’s tempting to just draft a budget in pencil on a piece of paper and consider the task of budgeting done. However, half of the benefit of a budget is as a tracking tool. You’re likely going to lose that piece of paper, spill coffee on it or accidentally throw it away. If you’ve put some time and thought into it, you’re more likely to remember it and use it to track your expenses. Typing it up into a spreadsheet or writing it in a Holiday Planning Binder or notebook will make it more official.
3. Decide how much you can afford: Once you’ve found a system and created a list of expenses, you can start allocating the money you have to spend to each category. This is often the frustrating aspect of a budget, because we may feel there just isn’t enough.
You may discover that you’re going to have to cut something out, or be more creative, e.g. make some gifts, reduce the holiday card list, buy less gifts etc. Budgeting helps you to prioritize how you’d truly like to spend your money.
4. Track your spending: No budget is effective without actually tracking your spending. Keep your receipts and enter your spending daily, or every other day. This is the best way to control your budget. Try to get everyone on board and create a central location for all holiday-related receipts.
It’s clear that creating a holiday budget is the smart thing to do. It keeps you focused and on track, and also instills confidence that you’re spending in the areas that mean the most to you. You’re less likely to impulse buy because it won’t be part of your budget, and may instead, sabotage your efforts to stay out of debt in the New Year.
Once the season has passed, and you have not incurred any holiday debt, you’ll be excited to create a holiday budget every year!
Have you begun your holiday planning yet? Here’s a link to my free downloadable form for my Holiday Planning Checklist where you can write down a list of things you need to do to get ready for the holidays – Holiday Planning Checklist